Correlation Between Korea Petro and Daejoo
Can any of the company-specific risk be diversified away by investing in both Korea Petro and Daejoo at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Korea Petro and Daejoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Petro Chemical and Daejoo Inc, you can compare the effects of market volatilities on Korea Petro and Daejoo and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Korea Petro with a short position of Daejoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Petro and Daejoo.
Diversification Opportunities for Korea Petro and Daejoo
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korea and Daejoo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Korea Petro Chemical and Daejoo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daejoo Inc and Korea Petro is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Korea Petro Chemical are associated (or correlated) with Daejoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daejoo Inc has no effect on the direction of Korea Petro i.e., Korea Petro and Daejoo go up and down completely randomly.
Pair Corralation between Korea Petro and Daejoo
If you would invest 0.00 in Daejoo Inc on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Daejoo Inc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Korea Petro Chemical vs. Daejoo Inc
Performance |
| Timeline |
| Korea Petro Chemical |
| Daejoo Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Korea Petro and Daejoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Petro and Daejoo
The main advantage of trading using opposite Korea Petro and Daejoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Petro position performs unexpectedly, Daejoo can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Daejoo will offset losses from the drop in Daejoo's long position.| Korea Petro vs. Pungguk Ethanol Industrial | Korea Petro vs. EBEST Investment Securities | Korea Petro vs. Daejung Chemicals Metals | Korea Petro vs. DSC Investment |
| Daejoo vs. HB Technology TD | Daejoo vs. People Technology | Daejoo vs. CKH Food Health | Daejoo vs. Dong A Steel Technology |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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